Shoprite referred to SA consumer tribunal

THE National Credit Regulator of South Africa has referred Shoprite Investments and Shoprite Insurance Company to that country’s National Consumer Tribunal for breach of the National Credit Act.

The National Credit Regulator announced this week that it has referred Shoprite Investments and Shoprite Insurance Company to the National Consumer Tribunal.

This followed an investigation by the regulator, which revealed that Shoprite Investments and Shoprite Insurance Company have sold retrenchment and occupational disability cover to pensioners and consumers receiving government’s old-age grants.

The two companies have also been accused of selling retrenchment cover to a consumer with a waiting period of six months on a six months’ loan.

Shoprite Investments Ltd has granted credit recklessly to consumers, the regulator said.

“The sale of retrenchment and occupational disability cover to pensioners and consumers receiving government social grants is unreasonable and imposes an unreasonable cost to such consumers because they cannot claim benefits under these covers”, Jacqueline Boucher, acting manager: investigations and enforcement said.

“Credit providers are required by law to explain the terms and conditions of insurance policies to consumers at the point of sale. Consumers should not be sold insurance that is not suitable and appropriate for their needs”, Boucher said.

The regulator has requested the tribunal to order that Shoprite refund the affected consumers the retrenchment and occupational disability premiums. The regulator also wants an audit be conducted into Shoprite and that the reckless loans be written off. The regulator further wants Shoprite to pay an administrative fine.

The NCR said it will continue to conduct industry-wide investigations on credit insurance practices to protect vulnerable consumers such as pensioners and the disabled.